Canadian asset manager will also simplify its suite of money market funds including new ETF launches
Money market funds offered by CI Financial are to undergo some changes including significant fee reductions and new exchange-traded fund (ETF) launches.
The Canadian asset manager has announced that it is simplifying and modernizing its product line up following a strong run for the fund types since early 2022 when the war in Ukraine sparked a global inflation surge and prompted action from central banks.
“The increase in short-term interest rates over the past 16 months has generated strong investor interest in money market funds, as higher yields have made them much more effective as a source of income, in addition to their traditional role in preserving capital,” said Darie Urbanky, president and Chief Operating Officer of CI GAM and its parent company, CI Financial Corp.
One of the key changes announced is that it is cutting the fees on several of its funds:
- CI Money Market Class
- CI Money Market Fund
- CI US Money Market Fund
- CI Short-Term Corporate Class
- CI Short-Term US$ Corporate Class
The fees for these funds have been cut to 0.14% for Series F and Series P and to 0.39% for Series A, compared to previous fees ranging from 0.45% to 0.70% for Series F, from 0.25% to 0.75% for Series P and were 0.70% for Series A.
CI GAM does not charge administration fees to the funds.
As part of the simplification of fees, effective on or about July 28, 2023, Series E, EF, O, PP, X, Y and Z of the Funds, as applicable, will be redesignated Series A, F and P, as appropriate.
The redesignation will ensue that all the firm’s clients benefit from lower fees, and it says that no client will pay higher fees because of the changes. No action is required from investors and the redesignation is not a taxable event the firm has clarified.
“The significant management fee reductions we are announcing today will boost yields for CI GAM clients and ensure our funds remain competitive and relevant in today’s market environment,” added Urbanky.
The firm is renaming some of its funds, effective on or about July 21, 2023:
- CI Short-Term Corporate Class bcomes CI Money Market Corporate Class
- CI Short-Term US$ Corporate Class becomes CI U.S. Money Market Corporate Class
- CI US Money Market Fund becomes CI U.S. Money Market Fund.
CI GAM has also announced that it is launching two new ETFs called CI Money Market ETF and CI U.S. Money Market ETF.
The investment objectives of the two funds are ‘to seek to earn income at the highest rate of return that is consistent with preserving capital and maintaining liquidity.’
They are expected to begin trading on the TSX on or about July 25, 2023, with the tickers CMNY and UMNY.U, respectively.
CMNY will mostly invest in money market instruments that mature in less than 365 days while UMNY.U will focus on money market instruments denominated in U.S. dollars that mature in less than 365 days.
In line with the lower fees announced for existing funds, these two new ETFs will have fees of 0.14%.